The heads of General Motors Corp. and Renault-Nissan held crucial talks on a possible three-way alliance in Paris on Wednesday amid mounting doubts that a full-blown deal would materialize.
GM Chief Executive Rick Wagoner and Carlos Ghosn, who is chief executive of both Renault and its Japanese unit Nissan Motor Co. met at a secret location on the eve of the Paris auto show, one of the major events in the auto industry.
Both companies declined to comment on the talks but confirmed the CEOs' meeting. An industry source said the talks concluded around mid-day in Paris.
The meeting came ahead of the companies' self-set mid-October deadline to decide on whether to press ahead with a possible three-way alliance.
There are a lot of issues surrounding the potential alliance, GM spokesman Tony Cervone said, declining to be specific on the subject of the talks. There is a feeling that there is some disproportionate synergies that need to be considered.
But he said world's largest automaker remains open to the possibility of a three-way alliance and was on track to make a decision by the mid-October deadline.
The last meeting between Wagoner and Ghosn was in July in Detroit, when the two launched a 90-day review of a possible three-way alliance.
The two companies have given small teams of executives until October 15 to study the possible merits.
But some analysts doubt that an across-the-board alliance was in the works and that GM management would rather focus on its restructuring plan, which is expected to cut its recurring costs by $9 billion.
GM Chief Financial Officer Fritz Henderson told analysts in Paris on Tuesday that GM would carry out a thoughtful, thorough and objective assessment of the benefits of a tie-up with Renault and Nissan.
The Wall Street Journal reported on Wednesday that GM would demand billions of dollars from Renault and Nissan for agreeing to any alliance and said this was the latest sign the proposed deal was in trouble.
Cervone declined to comment on the report.
Other media reports have indicated that GM favors a narrow deal limited to a few dozen factories and several models, while Renault and Nissan want a broader alliance.
Ghosn has ruled out making any hostile move against GM.
(Additional reporting by Michael Shields in Paris)